Good day everyone and welcome to the Consumer Portfolio Services' 2023 Second Quarter Operating Results Conference Call. Today's call is being recorded. Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements. Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements. Statements regarding current or historical valuations are receivables because dependent on estimated of future events are also forward-looking statements. All such forward-looking statements are subject to risks that could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 15th for further clarification. The company assumes no obligation to update publicly any forward-looking statements whether as a result of new information further events or otherwise. With us here today is Mr. Charles Bradley, Chief Executive Officer; Mr. Danny Bharwani, Chief Financial Officer; and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I will now turn the call over to Mr. Bradley.

Thank you and welcome everyone to the second quarter earnings call. It was another good quarter for us. We continue to move forward with what we consider should be a very strong year. Sort of the highlights I guess you have to sort of look back at what was happening in the last couple of years during the pandemic. The pandemic was sort of a really rare event in the 30 years plus we've been doing this. With all the influx of government money, it really changed the dynamics of everything. Everything performed great. People got somewhat aggressive, but it was a whole windfall across the industry. So, 2022 became the first year where we got back to what we'll call pre-pandemic sort of the normal kind of business we should be doing. And as such because some of the people in the industry got aggressive and probably because of a few of the things that came out as a result of the pandemic government funding 2022 turned out to be a tougher year for just about everyone. So, having said that, our 2022 paper is doing quite well. It's not as great as we might have hoped, but it also is probably much stronger than most in the industry. So, we're really pleased with how that's performing. It continues to be an ongoing struggle but we're really making some progress in having that paper perform very well. 2023 should be even better. And then going forward we sort of have the new normal based on what happened after the pandemic. So, again, it's kind of nice that we've got our hands around the performance. We're looking forward to improving and again 2023 the rest of the year should be very good. Probably more important is the securitization market, it's…

Thank you, Brad. Let's go over start with revenues. Revenues for the quarter $84.9 million, that's up 4% from the $82 million in the prior year June quarter. For the year-to-date period $168 million is up 7% from the $156.4 million for 2022. The fair value portfolio is not really the key driver of that revenue yield. It's yielding 11.4% overall. The legacy portfolio which is accounted for under CECL not only has about $50 million left. So, it's really not really contributing anything meaningful to interest income. The other thing of note with the revenue change is the prior year had a fair value markup of $4.7 million in the second quarter of 2022 and $7.1 million total fair value markups for the six-month period. If you remove those markups the revenue increase is actually 10% for the quarter and 13% for the year-to-date period. Moving on to expenses $66.3 million in the June quarter is up slightly from the $64.7 million in March, and up 39% from the $47.8 million in June of 2022. The year-to-date expenses are $131 million for the current year up 41% from $92.8 million in June in the year-to-date period of 2022. The main reason for that increase as Brad alluded to is the increase in interest expense mainly from the securitization debt. Part of the increase is due to the larger debt balance by itself but the main contributor is really the rise in the cost of funds. The expenses for the year also includes an adjustment to loss provision and this relates to the reserves we had posted on our legacy portfolio. That is the portfolio that's not accounted for under fair value rather it's accounted for under CECL. All periods reflect an adjustment to this loss reserve to the legacy…

Thanks, Danny. In originations, the second quarter remained solid as we purchased $318 million of new contracts. That compares to $415 million in Q1 and a whopping $548 million during the second quarter of 2022. Now that reduction in volume was purposeful as we scaled back due to certain macroeconomic headwinds. We continue to operate with a tighter credit box and we kept a keen eye on the affordability of our product for our consumers. In terms of affordability, we continue to hold firm on our payment-to-income and debt-to-income ratios. The PTI trended down for the quarter, which is good and the DTI remained flat, which considering inflation in the raising rates is good for our customers. One key metric we're tracking right now is the average monthly payment which for Q2 was $530. That remained relatively flat over Q1. And that payment actually is well below the industry average in our space and is a good indicator that our credit box is maintaining affordability for our customers. As I reported last quarter, the demand for our product remains strong. We are getting roughly 8,000 applications a day, which is slightly less than Q1, but that's expected due to seasonality, tax season in Q1, et cetera. Our approval rate ticked up a bit in Q2, which is good moving from 59% to 62%. The average amount financed for the quarter was $20,800, which is down about $1,000 quarter-over-quarter and down $2,500 in Q2 of 2022. And of course that is directly related to the cost of used cars. Most important we continue to hold a strong APR in Q2 where we registered an average APR of 21.46%, which is about one point higher quarter-over-quarter and significantly higher than the average APR in Q2 of 2022, which was 16.33%. So the…

Thank you, Mike. So I think you can tell, overall as much as we like exciting years 2023 has been slightly kind of rebuilding year. So we set ourselves up for the future. Again we had all the benefits of the pandemic in 2020 and 2021, 2022 was sort of the let's figure out what the normal is going to be. And then 2023, is make sure that you've got your hands around 2022 and you move forward in 2023. So at this point we're halfway through the year. Obviously, a little bit more than halfway through the year. And we think we're exactly where we want to be in that sense. And so now we're back to the mode let's grow, let's get bigger. Let's do all things we can. Again, important things in that, is we know that the financial markets are healthy. We know that our cost of funds should be relatively flat and potentially down depending on which side of the recession soft landing you take. So again, knowing those things in terms of our performance, in terms of our cost of funds, in terms of the economy those are the things we've been sort of waiting on. And at this point we probably feel like, we have arms around that. And we can move forward. So over the rest of this year and into next, let's get going again. And see how much we can grow and build out our portfolio. With that, I think, that's all we have for today. And we look forward to speaking to you in the next quarter. Thank you all for attending. End of Q&A: Thank you. This concludes today's teleconference. A replay will be available beginning two hours from now, for 12 months via the company's website at www.consumerportfolio.com. Please disconnect your lines at this time. And have a wonderful day.